Investments in Dutch startups rose to record levels in the past three months of this year. In the second quarter of 2021, a total of $2.6 billion was invested in Dutch startups. That is three times as much as in the first quarter of this year, when $887 million was invested. The biggest investments in the Netherlands went to cloudtech startup Messagebird ($1 billion) and fintech startup Mollie ($805 million). In terms of sectors, fintech, professional services, healthcare and transport were popular. Europe-wide, too, investments involving venture capital rose to a new record, from $24 billion in the first three months of 2021 to $34 billion in the second quarter of this year. Worldwide, $157 billion was invested in startups in the past three months, nearly 7% more than the $147 billion in the first quarter. Worldwide, the second quarter saw 10 capital injections worth more than $1 billion, spread across eight countries, a record. Swedish-based Northvolt heads the list with an investment of $2.75 billion, followed by US firm Waymo with $2.5 billion and the Indonesian company J&T Express with $2 billion. These figures are taken from Venture Pulse, the study conducted by KPMG into worldwide investments in startups.

Odd ones out in the market

“Worldwide, more and more non-traditional investors have been shifting their focus to startups in recent months”, observes Pien Lucassen of KPMG’s consultancy group Emerging Giants. Seelen: "As a result of the success of many recent IPOs and a growing fear of missing the boat, less typical venture capitalists are increasingly turning their attention to late stage firms in particular. Primarily, that means private equity players, pension funds and sovereign wealth funds. But wealthy universities and family owned businesses are also increasingly interested in the market. The same is true of hedge funds and mutual funds. They expect to be able to secure good long-term returns with little risk when the companies they are investing in go public. SPACs, Special Purpose Acquisition Companies, are also gaining an increasing grip on the market, particularly in the United States. In the second quarter, for example, the fintechs SoFi and Payoneer were floated by an SPAC. In Europe and Asia, interest in SPACs is mainly coming from technology firms.”

Biotech and healthcare particularly popular

Over the past three months, venture capitalists have been particularly interested in the biotech sector and startups which are active in developing new medicines. For example, US company Treeline Biosciences secured $735 million in new capital. And significant investments were made outside the United States too, for example in UK firms Alchemab Exscientia ($82.8 million) and ViroCell Biologics ($118 million), the Chinese company Jinwei ($123 million) and Canadian-based Ventus Therapeutics ($100 million). Lucassen: “The pandemic has underlined the huge importance of healthcare and biotech and the development of new products and services, such as digital care applications and medical devices. And although the pandemic is not yet over, optimism about recovery is growing and investors are focusing on sectors that will generate high yields in the post-pandemic world."

Increased focus on ESG

Lucassen also believes that investments in startups will again be significant in the third quarter of this year.  Seelen: “Worldwide and in the Netherlands. Investors are sitting on big cash reserves and recent IPOs are encouraging firms to put that capital into startups in particular. Startups in the fintech, healthcare and biotech sectors are set to benefit. Companies specialising in cybersecurity will also see interest from venture capitalists increase as a result of the growing number of transactions taking place in the cloud. Moreover, investors are increasingly looking at companies through an ESG lens, at the way they deal with the environment, society and good governance. Startups that contribute to sustainable business can therefore expect to attract more and more money."